Dipak Gyawali: Nepal-India river deals need a thorough revision

Devendra Gautam

Devendra Gautam

Dipak Gyawali: Nepal-India river deals need a thorough revision

Devendra Gautam of ApEx caught up with water resources expert and former minister for water resources, Dipak Gyawali, to discuss Nepal-India water relations and the way forward. 

What’s your take on major river deals with India?

Indian scholars, including those from Bihar and Uttar Pradesh, have said this previously… India first decides that it needs this or that river and then imposes a treaty/agreement on Nepal. Besides, a treaty/agreement should be read in its wider political context, whether it’s the Treaty of Sugauli or the 1950’s Peace and Friendship Treaty. 

Nepal entered into the Koshi Agreement after the overthrow of the Rana regime in the 1950’s. That was during the premiership of Matrika Prasad Koirala. The year 1958 saw Nepal under the premiership of BP Koirala signing the Gandak Agreement with India. These deals happened despite protests in Nepal. 

For about 30 years of the Panchayat regime, no such treaty/agreement happened with India. In fact, the regime of King Mahendra revised some of the unequal provisions of the Koshi and Gandak agreements through talks with India. 

King Birendra was under tremendous pressure from India to give away the Karnali river, but he did not budge.

After the political change of the 1990’s, the first thing that the democratically-elected government of Girija Prasad Koirala did was secretly sign the much-controversial Mahakali Treaty with India. 

Nearly 25 years after the Mahakali Treaty, the promised dawn of national prosperity is not even on the horizon……..

In the case of the Mahakali, the Supreme Court under Chief Justice Vishwanath Prasad Upadhyay could have nixed this legal instrument while the ball was in the court. The court could have ordered the passage of this instrument with a simple majority instead of a two-third majority in the parliament. But in a back and forth, the court sent the treaty back to the parliament, which subsequently passed it with a two-third majority, courtesy of the Sher Bahadur Deuba-led Nepali Congress government, the Rastriya Prajatantra Party of the Panchas and the CPN-UML. 

The Krishna Prasad Bhattarai-led NC government, formed after the success of the 1990’s movement, had faced Indian pressure to enter into the Mahakali Treaty. But the diplomat that he was, Bhattarai told the Indians that his sole agenda was to deliver the country a democratic constitution. 

However, Prime Minister Girija Prasad Koirala took the matter in his own hands after the Congress got a two-third majority in the democratic elections held after the 90’s movement. During a visit to India, he signed the legal instrument secretly.   

Initially, the UML was against this treaty and had staged demonstrations against it. But as the then prime minister, Sher Bahadur Deuba of the Nepali Congress, took it upon himself to get this legal instrument a House nod, the UML balked and played a role in the ratification of the treaty along with the Rastriya Prajatantra Party of the Panchas. 

What’s more, the Madhav Kumar Nepal-led government of the CPN-UML harmed Nepal’s interests further by entering into a package deal with India by including the development of the Pancheshwar Project.     

Let’s revisit the background of this treaty. India had already constructed the Tanakpur barrage, along with a left afflux bund on a patch of highland on the Nepali territory, to divert Mahakali waters into the Sharada canal. India had also built the Tanakpur barrage and wanted the Panchayat regime to rubber-stamp this act. But the regime refused to do this. That was one of the reasons behind the abolition of the king-led Panchayat regime in the 90’s and straining of India’s relations with the monarchy. 

While defending this legal instrument despite public protests against the same, politicians of the time, including Sher Bahadur Deuba of the NC, KP Sharma Oli of the CPN-UML and Prakash Chandra Lohani and Pashupati Shumsher JBR of the Rastriya Prajatantra Party, had declared that the Sun would rise from the West, that Nepal would get trillions of rupees, with the implementation of this instrument…… That has not happened even 26 years after the signing of the treaty. 

There’s room for improvement in such treaties/deals?

There surely is. Take the case of the Mahakali Treaty. It has a provision for revision every 10 years. But none of the leaders have bothered to press for a revision in Nepal’s favor all these years. This is because such a move will leave them red-faced as none of their promises—a new dawn from the west, earnings of trillions of rupees every year—have materialized.  

Instead of seeking the revision of existing deals, successive governments have inked fresh deals over Arun, West Seti and Upper Karnali rivers…..

In the 1990’s, there was a plan to develop the Arun III hydropower project for domestic consumption. We protested the project citing financing arrangements that would have pushed project costs over the roof. Eventually, the World Bank withdrew from the project. There’s a need to keep in mind the fact that we were not against the project per se, our protest was against the terms of financing that would have made the project one of the costliest when it came to per unit cost of power generation….. 

What’s the controversy over the Upper Karnali project?

As for the Upper Karnali project, the Supreme Court has issued an interim order (November 3 2022), putting on hold the agreement based on which the Indian promoter company Gandhi Mallikarjun Rao (GMR) was planning to sell 500 MW to Bangladesh after completing the construction of the 900-MW Upper Karnali Project. This is a welcome development.

The Karnali is a highly lucrative project. The Karnali-Chisapani basin has the capacity to generate thousands of megawatts of hydroelectricity, that too at cheaper rates. Development of the 900-MW project seems to be intended to capture the whole river system. Upstream, for example, in rivers like the Tila and Jawa, which drain into the Karnali river system, there are small projects. The 900-MW project will render the future of projects predating it uncertain. This way, the project is indeed aimed at getting hold of the entire river system.

We need some of the projects for domestic consumption as well. Karnali is one among such projects. Also, there’s a need to keep in mind the fact that the developer interested in the Upper Karnali project has questionable credentials. 

As for the 750-MW West Seti and 450-MW Seti VI projects, the Indian state-owned company, NHPC Limited, has plans to develop them.

One more thing: Power transmission to India should happen through national transmission lines and the government itself should invest in the development of such lines. It should not allow a foreign company/entity to also construct its own transmission line within the Nepali territories for cross-border transmission of electricity.

Does our political leadership, regardless of its hue and shades, have the spine to say no to projects if they tend to harm our interests?

No, it doesn’t. Recently though, Bhutan said no to the Indian proposal to develop the Sunkoshi project. This example should inspire us to put our national priorities first. 

Nepal seems to be going the way of Laos, the ‘battery charger of Southeast Asia’ ….. 

No, this is far from the case. Laos is way smarter than us. After developing hydropower projects needed for domestic consumption, Laos has stopped venturing into more hydels. Also, unlike Nepal, Laos does not have the flatlands, so it does not have to worry about the plains going under the water because of a dam-based hydel.

As for the Indians, they are very clever, they take their national interest seriously. When it comes to water-sharing arrangements with Nepal, they refuse even to abide by the Helsinki Convention, leave alone the guidelines of the World Commission on Dams. 

Each water treaty/deal with Nepal is unique is what they say.

On the other hand, we are not clever, we do not have a vision regarding the utilization of water resources for our own good. Our political leaders of different hues and shades do New Delhi’s bidding for the hospitality received during political struggles by entering into deals that serve India’s interests. 

That is why, perhaps, Indian officials and experts say of the Nepali people (I have often heard them make this remark): Achchhe log hein, par bevkuf hain (The Nepalis are good people, but they are fools). 

We have a suppressed demand for energy. Despite this, we are talking about exporting the green energy—hydroelectricity—not only to India, but also to Bangladesh…… 

Yes, per household power consumption in India is 1200 MW, whereas in Nepal it’s barely 300 MW. Instead of focusing on increasing the consumption of green energy, we are talking about exporting it. 

This, despite several studies pointing at multiplier effects associated with domestic consumption of hydroelectricity. Domestic consumption of 1 cent of electricity yields a benefit of 86 cents, per a USAID study.   

For Nepal, India is a monopsony market, meaning that Nepal cannot command price for its green energy in the Indian market. This is because per unit hydropower generation cost in Nepal is higher than in India and other countries. We cannot sell it cheap, given a high cost of power generation.

Ethiopia is constructing the (6,450-MW) Grand Ethiopian Renaissance Dam on the Blue Nile at far cheaper rates. Why can’t we do the same? Per unit power generation cost should be more or less the same around the world. Why does this not apply to Nepal? 

About the prospects for exporting hydropower to Bangladesh via India…. I remember interacting with India’s former Foreign Secretary Muchkund Dubey. In such interactions, Foreign Secretary Dubey used to show India’s willingness to purchase hydropower generated in Nepal. But the high cost of generation of hydropower in Nepal is a factor that cannot be discounted while talking about the export of hydropower. 

Flood control is the topmost priority for Bangladesh. As for water and sources of energy, it has enough of them, natural gas and all. I have said during interactions with Bangladeshi experts and officials that your country wants to export flood to Nepal throughout the year by investing in the construction of dam-based hydels. If such projects materialize, Nepali territories coping with seasonal floods and inundation will have to deal with floods and inundation all year round. Even this is okay, I say to them, provided they are willing to foot the associated costs, including the cost of inundation of our territories for the sake of protecting Bangladesh from flooding and inundation.  

I don’t think India will allow the use of its territories for the transmission of hydroelectricity generated in Nepal to Bangladesh. 

Your take on Nepal’s increasing reliance on fossil fuel, whose prices are never stable?

While Maoist leader Baburam Bhattarai was in power, he went for the expansion of roads. This move is also behind the increased consumption of fossil fuel in Nepal. Data show that this petroleum addiction has been increasing in the country over the years. 

For motorists like me, wider roads are indeed good. But what of the other people? What about the country? Increasing addiction of petroleum products is harmful for the environment and other aspects. 

Produced water—water collected in dams and reservoirs by inundating territories and displacing communities—costs worldwide. Are we, by demanding a fair price for produced water, ‘weaponizing water’?

India has introduced provisions stating that it will not purchase power generated with Chinese investment. Despite a toughening of stance, India sold the Upper Marsyangdi hydel license to a Chinese company. On the contrary, India is weaponizing water through such provisions, not Nepal, by taking it as a strategic asset.

We seem to be focusing on hydroelectricity, not on water for irrigation, navigation, fisheries and drinking while going for harnessing our rivers. We seem to be forgetting that sources of freshwater are very limited in comparison to sources of energy….

Consider, for example, the reservoir-based Budhi Gandaki Project (1,200-MW). This project can irrigate around 1 lakh hectares of farmland down south. It can also irrigate fields across the border. We need to take cross-border benefits into account while developing this project. The project should be built on the basis of cost and benefit-sharing.  

With Nepal’s water sovereignty severely weakened, how will the local levels, the provinces and the center fare? Do political leaders discuss this issue with you?     

Political leaders do not consult us. In fact, they don’t need to. Our inputs are all there, in the public domain. What they need to do is implement those suggestions. They need to put national interest above all else. 

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